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A country that spends
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a lot of resources on
a "socialised" health
the sector, and what are
its health, but lacks
PANORAMA US pharmaceuticals have enjoyed their time inthe sun, but is it time to get out the umbrellas?
COFACE ECONOMIC PUBLICATIONS
By Coface Group Economists
espite having the highest
igned to correct these shortcomings, in
prices would certainly affect the bot-
healthcare expenditure of
particular by increasing health insu-
tom line of the companies working in
all industrialised nations
rance coverage. Yet beyond this ques-
this sector, especially the laboratories
D(17.1% of GDP in 2013), tion of coverage, cost has become a who would be forced to review their
the US public health out-
crucial issue. Households are finding
operations and cut back on research
comes are being outper-
that the high price of medicines is
and development (R&D) spending.
formed by other advanced nations.
becoming prohibitive. This has led to a
Back in 2010, the introduction of the
rising call for reform (especially during
(1) Dubbed "Obamacare", the ACA is discussed in
Affordable Care Act (ACA) (1) was des-
the presidential campaign). A drop in
greater detail below.ALL OTHER GROUP PANORAMAS ARE AVAILABLE ON

AUGUST 2016US pharmaceuticals have enjoyed their time inthe sun, but is it time to get out the umbrellas?A COUNTRY THAT SPENDS A LOT OF RESOURCESON ITS HEALTH, BUT LACKS EFFICIENCY1.1. Medicines even more expensive
But it's not just the cost of drugs that is an issue,
than in Europe
and one study conducted by the InternationalFederation of Health Plans in 2013 showed that
The price of medicines has risen sharply in the
the cost of hospital services is also high. The
USA in recent years. Gleevec (leukaemia) cost
authors in fact found that the USA charged more
270% more in 2015 ($118,000/year) than in 2011
than every one of the comparator countries (2).
($31,930/year). The cost of Januvia (diabetes)
The cost of an angioplasty or bypass is nearly
rose from $146/month in October 2006 to $213
twice as much as in New Zealand or Australia.
in December 2013 (+46%), and $331 in January
The same applies to diagnostic imaging tech-
2015 (+55%). One good example was the deci-
niques (e.g. scans). The average cost of a hospi-
sion taken by Pfizer Inc. in January 2016 to
tal stay in America is $18,000, whereas in
implement a massive 20% price hike for 100 of
Canada, the Netherlands and Japan, it ranges
between $4,000 and $6,000.
Contrary to other advanced nations, the law pro-
Graph n°1
hibits the country's biggest buyers, such as
Difference between US discounted drug prices and the average price in five
Medicare (3), from negotiating prices directly with
advanced nations*
the drug companies. In the USA, it is the phar-
maceuticals that set the price, as opposed to theEuropean States where the price is set by the
healthcare system. Prices are generally higher inAmerica than in advanced countries, despite the
fact that US insurance companies give discountsfor a large number of drugs. According to Lan-
greth et al. (2015) (4), of the eight top-sellingmedicines in advanced countries, seven were
more expensive in the USA, even after discounts(graph n°1).
The drug companies justify these high prices by
high R&D spending ($50 billion in 2014, 0.3% of American GDP) and a relatively short-lived
global patent protection (12 years before genericversions can be produced).
* Gerrmany, Canada, France, Japan, United Kingdom
Source: Bloomberg
(2) With the exception of cataract surgery
(3) A federal programme initially aimed at the over 65s subject to certain income requirements.
(4) Langreth et al., 2015, "The U.S pays a lot more for top drugs than other countries", Bloomberg.
Drugs have become more effective, as sugges-
1.2. Public health falling well behind
ted by the fall in potential years of life lost (6)
since the 1960s. However, there are still diffe-rences between countries in terms of cost-effec-
Patients are suffering from the high cost of their
tiveness. For every dollar spent, Japan generates
medicines: 90% of seniors and half the total
a sevenfold greater health gain than the USA.
population take prescription drugs each month.
This ratio is fivefold in France, threefold in the
A 2013 study (5) found that three out of every five
UK and twofold in Sweden. The USA therefore
personal bankruptcies in the USA was due to
spends relatively more than other countries for
exorbitant medical expenses.
poorer health outcomes. This has been confir-med by a survey of quality of life indicators in
Graph n°2
the USA. The country scored significantly worse
Health indicators in the USA and 12 advanced countries*, 2013
than other advanced economies, apart from thecategory of daily smokers aged 15 years and
over (graph n°2).
Life exp. at birth
Whilst it is true that these figures have improved
% of pop. age 65+ with two or
in the long-term, the same also applies to the
more chronic conditions**
other OECD countries. On the other hand, obe-sity is the only indicator studied to have deterio-
rated over the long-term in each one of the
13 countries, due to changing lifestyles. The USAis particularly prone to this problem, with two
Infant mortatlity
thirds of the population overweight, of which
per 1,000 live births
one third are obese. As well as the obviousimpact on health, obesity carries a high econo-
Practising physicians
(per 1,000 population)
Advanced economies
mic cost. One study that came out in 2009 (7) put
it at between $147-$210 billion a year (0.8-1.2%GDP). As well as the quality of life statistics, per-
% of pop. (15+) who are
ceived quality of life has also fallen, according to
the Kaiser Institute. The proportion of adults
believing themselves to be in poor health rosefrom 13% to 18% between 1993 and 2013.
* Average indicator of 12 advanced economies (Austalia, Canada, Denmark, France,
Germany, Japan, Netherlands, New Zealand, Norway, UK, Sweden, Switzerland)
** Excluding Denmark and Japan
1.3. Uneven coverage
Source: OECD, The Commonwealth Fund, Coface
The inefficiencies of the American health caresystem are hitting the most vulnerable popula-tions the hardest. People who are divorced orseparated, those with a lower level of education
Graph n°3
and the younger populations are the most likely
Percentage of people without health insurance coverage
to not have medical insurance (graph n°3). Thisproblem is exacerbated by the fact that, accor-
ding to the latest report from the US Census
Bureau (8), the uninsured rate remains high, at10.4% of the population in 2014 (33 million peo-
ple), despite a recent improvement (41.8 million
in 2013); the OECD average is less than 3%.
Since the introduction of the ACA, the number ofpeople without health insurance fell by 8.8 million
in just one year, despite the fact that 17 States
have yet put in place the coverage offered by thescheme. In fact, there are marked differences bet-
ween the States in terms of coverage. Northern
States have on average a higher rate of coverage
than the Southern States. According to a Gallup
survey, Massachusetts recorded the lowest num-
ber of uninsured (3.5%) and not only was Texas
the highest (22.3%), but it was the only one to
come in at over 20%.
Ethnic origin
Source: US Census Bureau
(5) NerdWallet, 2013, "NerdWallet health finds medical bankruptcy accounts for majority of personal bankruptcies".
(6) OECD statistic that measures the number of years remaining that would have been lived were it not for premature death.
(7) Finkelstein et al., 2009, "Annual Medical Spending Attributable to Obesity". Health Affairs
(8) US Census Bureau, 2015, "Health insurance coverage in the United States: 2014"
ARE WE EN ROUTE TO A "SOCIALISED"HEALTH CARE SYSTEM?2.1 Using the ACA to redress thebalance between insuredpatients and the insurers andcare providers
The enactment of the ACA was intended to give
The case of hepatitis C drugs gives us a good idea
uninsured Americans a more accessible, higher
of the impact of the ACA. Again according to the
quality and affordable health care system. This
IMS, only 18,000 people were receiving treatment
aim went hand in hand with the desire to reduce
for this condition in 2013. That number rose to
the number of uninsured people, in particular by
170,000 in 2014, and 249,000 in 2015, most of
forcing them to take out health insurance or
which were patients insured under federal pro-
accepting them onto Federal programmes (9).
grammes (69%). Nevertheless, although 28% of
Since 1 October 2013, nearly 12.7 million Ameri-
these patients were able to receive treatment
cans have taken out health insurance via one of
under their insurance without the need for a fede-
the digital marketplaces (10). The CMS (11) says that
ral programme, some of them took out their
these gains resulted in a 5.3% increase in health
policy using the marketplaces organised by the
expenditure in 2014, compared to 2.9% in 2013.
The other factor that has been highlighted is thearrival of expensive drugs onto the market.
Beyond health insurance coverage, one of the
Again according to the CMS, Americans spent
salient features of this reform is cost manage-
nearly $11 billion in 2014 on hepatitis C drugs, out
ment, because not only does the Government
of a total of $151 billion in new health spending.
grant tax relief to the lowest income households
In turn, the IMS estimates that the American
who take out insurance via one of its market-
drug market grew by 14.2% in 2014, but adds
places, but it has also widened the scope of
that it experienced slower growth in 2015
some of its federal programmes (Medicare and
Medicaid). Nevertheless, the Federal State iscurrently finding it hard to control drug prices,unlike the European States.
2.2 Bring on the presidential Graph n°4
Annual prescription market, in billions of dollars and as a percentage change
Most of the people questioned for a KFF survey (12)in October 2015 wanted the Federal Govern-
ment to regulate the prices of drugs used
to treat chronic conditions (diabetes, cancer,cardiovascular disease etc.). A total of 77%
of those surveyed supported this proposal,
regardless of their political affiliation (Table n°1page 5).
Source: IMS Health
(9) Mainly Medicaid: a programme designed to grant health insurance coverage to the most disadvantaged groups.
(10) This percentage differs from the Census Bureau figures because it comes from a survey conducted by Gallup for its Healthways Well-Being Index.
We wanted to include it because it is a recent figure.
(11) Federal agency that administers the Federal social insurance programmes, including the ACA.
(12) Kaiser Family Foundation: a non-profit organisation that aims to focus the debate on national health issues.Table n°1
Priorities for the new US President according to a KFF survey
Making sure that high-cost drugs
Making sure that high-cost drugs
Making sure that high-cost drugs
Making sure that high-cost drugs
for chronic conditions, such as HIV,
for chronic conditions, such as
for chronic conditions, such as
for chronic conditions, such as
hepatitis, mental illness and cancer,
HIV, hepatitis, mental illness and
HIV, hepatitis, mental illness and
HIV, hepatitis, mental illness and
are affordable to those who need
cancer, are affordable to those
cancer, are affordable to those
cancer, are affordable to those
who need them (85%)
who need them (75%)
who need them (73%)
Government action to lower
Government action to lower
Government action to lower
Repealing the entire
prescription drug prices (63%)
prescription drug prices (74%)
prescription drug prices (60%)
health care law (58%)
Making sure health plans have
sufficient provider networks of
doctors and hospitals (63%)
Making sure health plans have
Making information comparing
Government action to lower
sufficient provider networks of
Protecting people from being
the quality of health care
prescription drug prices (56%)
doctors and hospitals(58%)
charged high prices when they
provided by doctors and
visit hospitals or outpatient clinics
hospitals more available to
covered by their health plan but
are seen by a doctor not covered
by their plan (63%)
Source: Kaiser Family Foundation
The drastic rise in the price of certain drugs in
In turn, before he stepped down the CEO of
2015 easily explains the results of this survey. For
Valeant was called before the United States
example, the 5,000% increase in the price of
Senate to explain his company's price strategy for
Daraprim (13), which went from $13.5 to $750 after
the newly-acquired Nitropress and Isuprel. These
Turing Pharmaceuticals (14) purchased the marke-
numerous examples angered the public, and moti-
ting rights (graph n°5).
vated each party's candidates for the Presidentialprimaries to suggest ways of lowering the price ofprescription drugs. Donald J. Trump, the Republi-can presumptive nominee, announced plans to
Graph n°5
allow the Federal authorities to negotiate drug
Sharper rises in the price of medicines
prices directly with the laboratories. He estimatedthat this would save the taxpayers $300 billion,but stopped short of explaining how he intended
to achieve this goal. However, that $300 billionaccounts for nearly 80% of the spending on pres-cription medicines recorded by IMS Health in
Trump also suggested allowing the importation ofdrugs. A number of analysts jumped on this pro-
posal, pointing out that some of the cheapestdrugs would come from countries with low ornon-existent quality controls. This is precisely whythe FDA has banned the import of drugs and
active ingredients from any one of 38 Chinese factories, after inspections raised concerns aboutthe integrity of their quality control data. In 2008,the import of a counterfeit ingredient (16) led to the
death of nearly 243 Americans. A similar approach
has been used in India, where generics manufac-turers (17) have been banned from exporting to the
USA after failing FDA inspections.
(13) An antiparasitic drug whose patent expired several decades ago
(14) Drug company founded by Martin Shkreli, a controversial figure who is facing several federal charges.
(15) Medicines use and spending in the U.S., A review of 2015 and outlook to 2020, IMS Institute for Healthcare Informatics.
(16) Used to make the blood thinner heparin.
(17) Producers of generic drugs.
Over on the Democrat side, Hillary Clinton is an
Woolhandler and Himmelstein (20) believe that
avid supporter of universal coverage. Back when
switching to a single-payer system would mean
her husband, Bill Clinton, was serving his first Pre-
greater bargaining power, especially for the price
sidential term, the First Lady headed up a task
of prescription drugs. These two professors also
force for granting health insurance coverage to
think that, when it comes to prescription drugs,
every US citizen and permanent resident, by
the system would allow savings of $1 trillion over
making it compulsory for them to enrol in a health
the next decade.
plan (with the poorest being exempt from payingthe premium). The proposal also included a limit onspending at the discretion of patients. However, the
2.3 Ever-increasing drug costs,
plans came to nothing due to disagreement within
or the development of specialty
the Democrat camp and pressure from the health
insurance sector.
According to IMS Health, drug spending in the
For the 2016 campaign, one of her proposals is to
USA rose by 12.2% between 2014 and 2015. The
encourage enrolment in a health plan via the Medi-
most buoyant segment of this market is spe-
care programme. She plans to limit rises in pre-
cialty medicines (21). Again according to IMS, this
miums in order to combat the unwarranted profits
segment now accounts for 36% of total spen-
generated by the pharmaceutical industry. As we
ding, and rose by 21.5% in 2015. Sales of this
have seen, Americans pay much more for their
type of drug contributed 70% of total spending
medicines than people in other developed countries,
growth between 2010 and 2015. Their market
especially in Europe. In addition, this proposal would
share in 2010 was only 24% (22).
allow the US Secretary of Health to negotiate thecost of prescription medicines (as do the European
These drugs cover the full range of treatment
agencies when they determine the reimbursement
areas, but in particular they target patient micro-
level), with a monthly cap on out-of-pocket (18) drug
populations with hard-to-treat conditions. Some
costs of $250 per person.
see them as innovative, whilst others have com-mented that their benefits are only marginal and
Bernie Sanders, the other candidate for the
do not justify the price, which is particularly high.
Democratic nomination, has also taken the plunge
The price of Sovaldi from Gilead Sciences comes
and suggested a single-payer health care plan, an
to $84,000 per course of treatment, or $1,000
idea inspired by Western Europe. His proposal
per pill. According to the AARP Public Policy Ins-
involves developing the Medicare system for all US
titute, the average price of specialty medicines
citizens and residents and introducing a single-
rose above the median US household income
payer model, whilst doing away with deductibles
in 2013. On average, a person insured through
and "copays" (19). According to his sponsor, a family
his employer will be responsible for a copay of
of four would save $6,000 a year under this
nearly 2% of the price of the medicine, but
scheme. According to his detractors, however, the
also has to cope with annual increases in his pre-
plan would not only result in a fall in health spen-
mium. In fact, according to a survey by the
ding, but it would well and truly worsen public
KFF (23), the yearly premium for a family rose by
debt by adding the exorbitant and far-fetched
203% between 1999 and 2015, whereas the ave-
sum of $18 trillion over 10 years. Nevertheless,
rage nominal income went up by only 56%. Thissame survey found that the number of house-holds covered by a company health plan with a
Graph n°6
general annual deductible increased from 55% in
PPI comparison for pharmaceutical products and manufactured goods
2006 to 70% in 2010, to 81% in 2015. The average
deductible was $303 in 2006, $646 in 2010 and$1,077 in 2015.
PPI for pharmaceutical goods
This rise in health care costs cannot be attribu-
PPI for manufactured goods
ted solely to the rise in the cost of drugs. Spen-ding on hospital stays and other services has
also contributed to the situation. Nevertheless, astudy by the Federal Reserve Bank of San Fran-
cisco (24) concluded that core inflation had beenheld back by health-care services due to thelegislative measures taken by Government to
restrict public insurance payments to the Medi-care and Medicaid programmes (by nearly half).
For the time being, however, there are no figuresto corroborate this view, since the production
price index for pharmaceutical products has
been growing faster than for manufactured
goods (graph 6).
(18) « out-of-pocket drug spendings »
(19) Amounts paid by the patient towards the healthcare services received. A system put in place by the insurance companies to avoid part of the risk, and
also intended to avoid drastic increases in premiums.
(21) Defined by the IMS as medicines for complex diseases and if injected can only be administered by a specialist.
(22) This represents considerable growth, especially given the sharp rise in generics following the recent Patent Cliff.
(23) Kaiser Family Foundation/HRET Survey of Employer-Sponsored Health Benefits, 1999-2015.
(24) Clemens, Gottlieb, and Shapiro, Mai 2016, Medicare Payment Cuts Continue to Restrain Inflation, Federal Reserve Bank of San Francisco Economic Letters.
Largely spared by the financial crisis, production
Price controls are easier to implement if there is
prices in the pharmaceutical sector have been ris-
a public healthcare systems, such as in Europe,
ing steadily, contrary to the manufacturing sector
compared to the USA, with its fragmented
as a whole. Drug prices have gone up sharply,
financing system and the lesser weight of the
without any signs of a slowdown, despite the
payers (compared to their European counter-
upset to the American economy in 2008 and
parts). However, attempts have been made to
promote such practices. For example, we notethe rise in power of medico-economic review
We predict (25) a rise in the pharmaceutical PPI of
agencies such as ICER (26), whose work reflects
9.3% by the end of 2016, compared to 7.2% in 2015
the debate surrounding certain diseases. At the
and 8.5% in 2014.
same time, certain PBMs (27) and health careinsurers use the results published by these
various institutes to demand price cuts (if thelaboratory does not have a monopoly). AETNA,
The most suitable method is an ARIMA model (5, 1, 2), whereby
one of the country's biggest insurers, projects
a future value can be predicted based on its past values and
that its value-based spending will rise to 70%
a series of random shocks.
by 2020, compared to its current rate of 30%.Others are already following in its footsteps (the
(𝟏−𝜽 𝑩−𝜽 𝑩𝟐−𝜽 𝑩𝟑−𝜽 𝑩𝟒−𝜽 𝑩𝟓)(𝟏−𝑩)𝒀
Blue Cross and Blue Shield plans, Humana).
=(𝟏−𝝎 𝑩−𝝎 𝑩𝟐)𝜺
WHAT DOES THIS MEAN FOR THE SECTOR, AND WHAT ARE THE RISKS?3.1 A fall in profits?
Price being a fundamental part of the equation
Let us suppose that the US drug companies
for the cost of the American health care system,
bring their prices down to the level seen in
reducing it would be a positive move for
Europe. France is a good example, because for
patients, but would reduce the appetite for risk
reimbursable drugs the country sits at the lower
among the laboratories and biotechs.
end of the prices charged.
According to IMS Health, Harvoni (28) from Gilead
Graph n°7
Sciences was America's top-selling drug in 2015,
Sales of the top five drugs in 2015 in the USA, in billions of dollars
generating revenues of $14.3 billion (graph n°7). Itmade only $1.6 the previous year, when it was first
marketed. A 12-week course of treatment costs
$94,500. In France, the negotiated price secured
by the CEPS (Economic Committee for Health-
care Products) and the Ministry of Health (29) isaround ¤46,000 or $51,865. Approximately
151,323 patients were treated this year. If theFrench price was applicable in the US (and assu-
ming there was no competition from anotherdrug), Harvoni's turnover would plummet by $7.84billion, a fall of nearly 45%. Sovaldi, made by the
same company, has had its reimbursement pricefixed in France at ¤41,000 ($46,227).
Source: IMS Health
(25) These figures were calculated using ARIMA forecasting.
(26) Institute for Clinical and Economic Review.
(27) Pharmacy Benefit Managers, who process prescriptions on behalf of insurers but negotiate the cost of the drugs directly with the laboratories and pharmacy
(28) A drug that according to the laboratory cures over 90% of Hepatitis C sufferers.
(29) Which issued a release on this topic.
In the absence of accurate information about the
Two practices employed by private insurers (not
laboratories' price structure, it is hard to predict
involved in government schemes such as Medi-
the effects of a fall in prices on a financial indi-
care, Medicaid, marketplaces, CHIPS) are also
cator such as EBITDA. Nevertheless, according
worth a mention: the exclusion of certain drugs
to the Census Bureau, drug manufacturers loca-
from the coverage lists, and rationing. They nor-
ted on American soil saw a 8% year-on-year rise
mally go hand in hand, whenever an expensive
in profits for the third quarter 2015 (30), after a 6%
drug provides therapeutic benefits to patients.
rise in Q3 2014 and a fall of 4% in Q3 2013
Some laboratories cite them as a risk factor that
(mainly due to the patent cliff).
can affect their bottom line. Nevertheless, it ishard to determine their actual effects on profita-bility using just public data.
The arrival on the American market of expensive treatments, as well as the development of health insurance coverage for millions of citizens, have led us to revise our risk assessment for this zone. It hasbeen reduced to a low risk.Table n°2
Global pharmacy sector assessments
Emerging Middle East
Ï The risk has improved
The risk has deteriorated
3.2 Effects on R&D.
The American drug industry often points out
ceuticals. They have pointed to a correlation bet-
that by charging high prices, it can generate suf-
ween the degree of regulation in Europe and the
ficient profit to be able to invest in R&D. Given
intensity of R&D. This effect is less marked if the
that the cost of bringing a molecule (31) to market
company has a strong presence in the USA,
is between $1-1.5 billion, it makes sense that
where companies are free to set their own
cheaper prices would mean less R&D spending.
prices. Likewise, a stronger presence in Europe,
Numerous econometric studies have highlighted
where there is strict regulation, brings a lesser
the existence of a causal link between the cost
inclination to invest in R&D (34). Arbitration is at
of drugs already on the market, and the fall in
play, because company well-being requires price
the number of molecules in the pipeline. Accor-
control in order to ensure access to care is uni-
ding to a study (32) by Abbott and Vernon, a 40-
versal, but they need to receive fair remunera-
50% fall in the cost of drugs in the USA would
tion for the risks they undertake.
lead to a 60% drop in the number of preclinicaltrials. This study is based on simulations to indi-
These two authors identify expected profits as a
cate the effects of price reductions, because few
key determinant of investment. This explains
molecules developed in the laboratory are ever
why therapeutic areas that closely match the
tested on humans: according to the Californian
needs of the Americans are those which are
Biomedical Research Association, 0.1% of these
given research priority, and why laboratories first
molecules get to clinical trials.
seek approval from the FDA, before any otheragency. According to IMS Health, nearly half of
European researchers (33) have tried to predict
the new molecules approved by the FDA bet-
the impact of European price regulation (i.e.
ween 2006 and 2015 were for oncology, infec-
price reduction) on R&D spending by pharma-
tions and neurological conditions.
(30) Figures for Q4 are available but are likely to be revised in the coming months.
(31) Estimated at $1-1.5 billion according to Prof. DeMasi.
(32) Abbott & Vernon, 2005, The Cost of US Pharmaceutical Price Reductions: A Financial Simulation Model of R&D Decisions, NBER Working Paper.
(33) Eger et Mahlich, 2014, Pharmaceutical regulation in Europe and its impact on corporate R&D, Health Economics Review.
(34) R&D is becoming ever more expensive, according to the sector, and is hindered by the various stages involved in bringing a drug to market.

3.3 Relief for households?
Nearly three out of every five personal bankrupt-
A mismatch between the needs of the patients and
cies are due to the debts accumulated by an indi-
their insurance coverage has been put forward to
vidual for health care needs. An older study (35),
explain this outcome. In fact, like the ACA, the aim
but whose conclusions are still relevant, tells us
of this reform was to grant health coverage for all.
that nearly 62.1% of all personal bankruptcies in
But with the patient still required to pay high costs
the USA were caused by medical bills. For 92% of
(out of pocket, deductibles, copays, and uninsured
those, the bill came to at least $5,000 - 10% of the
services), the likelihood of going bankrupt only
patient's gross annual income. It would be easy to
increased. The authors calculated that one in every
assume that these indebted households belong to
two households with an annual income of nearly
the most disadvantaged swathes of American
$44,000 could be out of pocket by $20,512 every
society, but the opposite is in fact true, with the
year i.e. nearly half its annual income.
typical patient profile being an educated, middle-class property-owner. Three quarters of the peo-
So, with the price of drugs rising constantly over
ple who went bankrupt had health insurance
the past few years, and based on our forecasts of
(about 77.4%). Having been declared bankrupt,
a further increase of around 9.3% (driven mainly
the out-of-pocket costs for the patient were on
we believe by the arrival of particularly expensive
average $17,943. The leading cause cited for these
specialty medicines), this trend looks set to con-
personal bankruptcies, mentioned by nearly 48%
tinue in the coming years.
of those surveyed, was hospital stays. However,this was followed by prescription costs (18.4%).
The ACA does not provide for a reduction in the
This cause was given by one third of cases when
price of drugs. However, this is a major issue, as
the patient suffered from a cardiovascular, pul-
we have seen above, with the KFF survey. A recent
monary or psychological condition. We note how-
study by Prof. Y. Zafar from Duke University in the
ever that "hospital costs" can include the price of
USA, the results of which were presented at the
drugs dispensed via the hospital.
ASCO Conference (36), demonstrates that patientswith a form of leukaemia requiring the expensive
Two years later, the same team studied medical-
drug imatinib (Gleevec (37)) but only able to get
related personal bankruptcies in relation to the
coverage under the bronze plan (38), would reach
introduction of Romneycare in the State of Mas-
the insurer's annual limit of cover in just three
sachusetts, a particularly interesting case since
months. And that is just for treating this condition.
the ACA drew inspiration from this law designed
The ACA only partially resolves this problem, and
to give health coverage to all. Bankruptcies rose
does not limit the impact of innovative and expen-
in this State by 51% between 2007 and 2009. sive treatments.
(35) Himmelstein et al., 2009, Medical Bankruptcy in the United States, 2007: Results of a National Study, The American Journal of Medicine.
(36) American Society of Clinical Oncology.
(37) Its price ranged between $90,000 and $118,000 in the USA before its patent expired. Even in this case, an Indian generics manufacturer announced it
could cut the price to $60,000.
(38) The cheapest plan if using the marketplaces set up by the ACA.
This document is a summary reflecting the opinions and views of participants as interpreted and noted by Coface on the date it was written and based on available information. It may be modified at any time. The information, analyses and opinions contained
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RHS Science developments RHS Science Strategy By sharing and improving RHS horticultural research the new Science Strategy aims (via four key themes) to continue to guide gardeners and growers. Using the vast, ever-growing collections of plants, insects, pathogens, books and art in its possession, the RHS can maintain its place as a leading contributor